One of the first things a customer is going to think about when making a decision about purchasing your product is “how much is it?”Ī good pricing strategy is ultimately going to be affordable for your target audience, but also cover the manufacturing costs of the product, employee salaries, and so on.įinding the right pricing strategy for your product is going to entice your customers, rake in those sales, cover costs, and ultimately bring in those ever-coveted profits. What are the benefits of pricing strategies? Oftentimes, pricing is considered an afterthought by organizations launching new products, when it should really be at the forefront of the decisions you make.Īfter all, the price point defines your product’s value and can make or break your customer’s purchasing decision.ĭownload Putting A Tag On It: The Product Pricing Playbook, to understand deeper into the significance of a strong pricing strategy, along with the six steps you should take to build, implement, and launch your product price. What is the importance of a pricing strategy? It’s important to do your market research and choose the right pricing strategy because your target audience is going to respond differently to different costs, depending on their circumstances (whether they can afford a premium price), and how other business owners on the market choose to price their products, too. Pricing strategies differ depending on the nature of the company and circumstances, which makes teaching it somewhat tricky because there really is no such thing as a one-size-fits-all solution.

The process helps companies generate maximum profits, whilst simultaneously taking into account the buyer, as well as trends within the market. Let’s take a look at the ways you can avoid such pitfalls and incorporate a pricing strategy that’s mutually beneficial for you and your prospective buyers.Ī pricing strategy is a model and/or method a company uses to price its product or service suitably and optimize its sales volume and market share. On the other hand, if you price your product too high, this could drive your customers into the arms of a competitor and increase your churn rate. If the price point is too low, you’ll run the risk of negating the effort you and your team have put in during the build-up to your eagerly awaited product launch.

Striking a happy medium when pricing is a challenge and will play a significant role in the overall success of your product. After receiving the ‘OK’ from your key stakeholders, you need to switch your focus to fine-tuning the most essential part of any successful product: a watertight pricing strategy.

Pricing strategy of a product